Why Rural Economic Development Is Top of Mind in Washington State and Elsewhere

One of the most telling moments at the recent Washington Rural Jobs Summit came late in the lunch keynote address by Mark Sweeney of the site selection and economic development consulting firm McCallum Sweeney.

Sweeney was describing the business of site selection—why risk-averse companies look to expand or move to new locations. Then he turned to the challenges of rural site selection.

“Rural locations represent greater risk,” Sweeney said.

Sweeney has seen this borne out over the decades he’s spent in site selection and economic development. Real estate deals are harder in rural communities because developers know if the original investment goes belly-up, it will be difficult to find another business to take its place. Labor availability is also a concern in small towns, particularly if the business expands or sees major workforce turnover.

Companies must ask themselves, will this community be able to grow with us?

Rural economic development is a thorny, multi-layered topic with many challenges and few obvious answers. But the summit—hosted in Moses Lake by the Association of Washington Businesses—was encouraging, not just because it focused on solutions for small towns and regions but also because so many people attended the event.

Sweeney himself said it speaks well for Washington that 250 decision-makers from every part of the state came together to talk rural jobs and economies.

“We put our focus on where the need is, and the need is the biggest in rural communities,” said Brian Bonlender, director of the Washington Department of Commerce.

The need to focus on rural counties and communities isn’t just a Washington state issue. Cities, metro areas, and states are increasingly seeking and talking about inclusive economic development. As the Brookings Institution defines it, inclusive economic development “occurs when all segments of society share in the benefits of economic growth.”

This means prosperity for every individual in a community—and growth for every type of community. In most states, rural areas need the most attention because of their negative net migration and falling incomes.

The Rural/Urban Divide

Emsi worked with Avista Utilities, a longtime partner, to present data at the summit on the urban/rural divide in Washington. The state is known nationally for the rapid tech and aerospace growth in Seattle and the Puget Sound area. But outside the I-5 corridor and Spokane, Washington is largely defined by fruit trees, farmland, and forests, all of which bring outside dollars into the state economy.

Much of rural Washington is still struggling. The most tepid (or negative) job growth the last five years in Washington have come in nonmetro areas like Lincoln and Grays Harbor counties. The population in these areas is also stagnant or declining.

<a href='https://economicmodeling.com/'><img alt='WA State Rural-Urban Analysis ' src='http://public.tableau.com/static/images/Wa/WashingtonStateRural-UrbanAnalysis/WAStateRural-UrbanAnalysis/1_rss.png' style='border: none' /></a>

One of the challenges for state and local leaders is that not all rural areas look the same. The dominant industry in many rural parts of Washington—and rural America—is agriculture, which needs far few workers than a generation ago but still struggles finding young workers. Lots of other small communities in Washington (as well as in Oregon and Idaho) used to be timber towns, while some have no clear industry—and no clear prospects for staying alive.

“There’s rural, and there’s rural,” said Jonathan Smith, executive director of the Yakima County Development Association, noting that Moses Lake—considered a rural community—has more residents (around 22,600) than 12 counties in Washington.

Rural Challenges and Solutions

The challenges and solutions at the summit centered on the workforce and fading infrastructure. For some rural communities, the lack of an airport or rail line is inhibiting growth. Spotty or nonexistent broadband is a major issue for some self-employed people and students.

It’s not all negative, though. Sweeney noted that companies are looking for site-ready locations in and around areas with good quality of life. That fits many rural communities to a T. Sweeney and other speakers at the summit recommended that rural communities focus on the cosmetics of their communities (e.g., clean streets and freshly painted store fronts), their digital and physical infrastructure, and their talent pipeline by partnering with high schools and community/technical colleges.

Few college graduates from rural towns immediately return to the communities in which they were raised. Yet communities with a strategic economic development plan and job opportunities have a better chance to lure those graduates back after they experience city life.